Colorado Man Sentenced to 83 Months in Prison for Role in $7.2 Million Biodiesel Tax Credit Scheme

justice.gov ^ | March 2, 2020 | DOJ

[ransomnote]

A Colorado resident was sentenced to 83 months in prison on Friday for his role in a biodiesel tax credit fraud scheme, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to court documents and statements made in court, Matthew Taylor and his coconspirators defrauded the United States by filing false claims for tax credits under a federal program that encourages production and use of renewable fuels. They created a fake company, Shintan Inc. (Shintan), that purported to be in the business of creating renewable fuels. From 2010 to 2013, the coconspirators then sought and obtained from the Internal Revenue Service (IRS) over $7.2 million in tax credits for renewable fuel produced, of which Taylor personally received $4.5 million. In fact, Shintan produced no qualifying renewable fuel. To avoid detection, Taylor and coconspirators transferred the fraudulently obtained funds through a series of bank accounts belonging to Shintan and other shell companies.

“Filing false renewable fuel tax credit claims is not just a crime against the IRS but a crime against all taxpaying citizens," said Andy Tsui, IRS--Criminal Investigation Special Agent in Charge. "Those engaged in this fraud should stop in their tracks and look at the consequences which include being sent to prison as a convicted felon and paying back all the taxes owed plus steep penalties and interest.”

“Friday’s sentencing shows the severe consequences for those who try to profit by defrauding renewable fuels programs,” said Lance Ehrig, Acting Special Agent in Charge of the EPA’s criminal enforcement program in Colorado. “EPA and our law enforcement partners are committed to holding accountable those who seek to defraud taxpayers for personal profit.”

On Feb. 27, 2019, Taylor pleaded guilty to one count of conspiracy to defraud the United States, one count of conspiracy to commit money laundering, and one count of money laundering.

In addition to the term of imprisonment imposed, U.S. District Chief Judge Philip A. Brimmer ordered Taylor to serve four years of supervised release and to pay approximately $7.2 million in restitution to the United States.

Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation and Environmental Protection Agency-Criminal Investigation, who conducted the investigation, and Trial Attorneys Sarah A. Kiewlicz and Stephen K. Moulton of the Tax Division, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website. Topic(s): Financial Fraud Tax Component(s): Tax Division

[from occupied ga]

I may be naïve, but I thought tax credits were only worth something if you have profits and taxes on those profits to offset with the tax credits.

[Balding_Eagle]

Meanwhile Hillary is considering running for president.

[NohSpinZone]

I think you’re right. That’s how I read it as well. https://afdc.energy.gov/laws/396

So how did these shysters generate enough revenue to offset more than $7M?

[jjotto]

I think the credits can be sold. That’s the way ethanol works.

[immadashell]

n 2009 the Obama administration gave $535 million to Solyndra, claiming that it would create 4,000 new jobs. However, instead of creating those 4,000 new jobs, the company went bankrupt. It was later revealed that the company’s shareholders and executives had made substantial donations to Obama’s campaign, that the company had spent a large sum of money on lobbying, and that Solyndra executives had had many meetings with White House officials.

Now they should go after Obama for restitution.

[ransomnote]

Not naive, just thinking more clearly!

Yes - so then wealth gets restained, and tax preparer gets rewarded. :)

[econjack]

That figures out to about $86,750/month...not bad wages.

[pierrem15]

You’re confusing a deduction (which offsets taxes paid) with a credit, which you get even if no taxes are paid.

[pierrem15]

If they had just gotten phony matricula consular ID’s, there would be no investigation or they couldn’t catch them.

[jjotto]

Here’s a longer explanation of how RINs work:

https://arstechnica.com/tech-policy/2018/08/ohio-man-is-latest-to-be-sentenced-for-millions-in-biofuel-credit-fraud/

[VTenigma]

Right up there with Hunter Biden.

[from occupied ga]

You’re confusing a deduction (which offsets taxes paid) with a credit, which you get even if no taxes are paid.

Thanks for the clarification

[from occupied ga]

Read the article - made my head hurt :-)

[Hyman Roth]

You’re confusing a deduction (which offsets taxes paid) with a credit, which you get even if no taxes are paid.

Credits are a dollar for dollar reduction in tax liability. But some credits are not refundable some are. Too voluminous to list here.

[SgtHooper]

LMAO! That came in from orbit!

[pierrem15]

You're right-- a deduction is only a reduction in taxable income, not a dollar-for-dollar reduction in tax.

I also forgot all credits are not refundable.

Thanks